PERF benefit changes to take effect Oct. 1
August 3, 2015
Employees participating in the Public Employees' Retirement Fund (PERF) program who are considering retiring in 2015 are reminded of an upcoming change to the PERF retirement benefits. Clerical, service and operations/technical staff hired before Sept. 9, 2013, participate in PERF, and this change impacts those who retire after Aug. 31, 2015.
There are two parts to PERF's retirement benefits: the monthly pension benefit and the annuity savings account (ASA). PERF provides a monthly pension benefit for the life of the retiree based on a formula that includes years of service, highest five years of salary and age at retirement. The ASA is an individual account where funds are invested throughout an employee’s working years, and the employee chooses how to use those funds upon retirement. The funds can be rolled over to another investment vehicle, taken in cash, or converted to purchase an annuity. By choosing to purchase an annuity, the ASA funds will increase the monthly benefit amount for life.
Beginning Oct. 1, 2015, PERF will change the interest rate used to calculate the monthly benefit for those who choose to annuitize their ASA funds from the current 5.75 percent to 4.5 percent. For employees to receive the 5.75 percent rate, their last day at the University must be Aug. 31, 2015, or sooner. This change does not affect benefits for those who choose not to purchase an annuity with their ASA funds.
After Dec. 31, 2016, the rate will be market rate.